Oil and Gas Heavyweights Back a Roadmap for Deep Decarbonization

We've entered a topsy-turvy moment in energy where coal supporters want solar power and oil execs have endorsed cutting fossil fuel use.

The latter appeared in a new decarbonization roadmap from the Energy Transitions Commission, an all-star working group charting the energy future that includes the chairman of Royal Dutch Shell, the head of sustainability at massive mining company BHP Billiton, the CEO of General Electric Oil and Gas, as well as leaders from prominent global banks, development organizations and climate-oriented NGOs.

The terminology in “Better Energy, Greater Prosperity” will be familiar to anyone following the Paris climate agreement and subsequent mobilization, but the cast of characters here differs in a crucial way. Each commission member might not agree with every detail, the report notes, but they collectively “endorse the general thrust of the arguments.” 

That means some of the world's most powerful fossil fuel providers and financial lenders have publicly affirmed the need to sharply cut oil, gas and coal usage and switch to clean sources. And they believe this can be done without macroeconomic disruption, but rather with a net welfare gain for society.

The commissioners set out to balance two highly complex goals: to drastically slash carbon emissions, as dictated by the Paris Agreement, while increasing energy access to hundreds of millions of people who lack the electricity needed for a modern standard of living. Framed differently, the world must increase the economic benefit per unit of energy consumed, while increasing the share of zero-carbon energy.

“Despite the scale of the challenge, the Energy Transitions Commission is confident that this transition is technically and economically possible, and that it would deliver important additional social benefits,” the report states. Those benefits include drastically improved air quality and new economic opportunities.

The success of this project requires a massive reorientation of global investments in energy infrastructure, particularly a shift from the kind of assets that have formed the backbone of several commission members' businesses.

The outlook calls for wind and solar power to rise to 45 percent of the global power mix by 2040, with non-intermittent, zero-carbon sources accounting for 35 percent and fossil fuels reduced to 20 percent. By expanding electrification to other sectors, the roadmap's conservative scenario suggests that 10-20 percent of all fossil fuels use could be eliminated by 2040, with the greatest opportunities in transportation, industry and buildings.

Together, this first wave of decarbonization would get us 48 percent of the way to the level of emissions deemed safe to keep global temperature rise well below 2 degrees Celsius.

That's both a huge lift and the low-hanging fruit — to actually keep temperatures in a safe range requires also decarbonizing the hard-to-replace fossil fuel activities (15 percent of desired reductions), improving energy productivity by 3 percent per year (30 percent of goal) and optimizing unavoidable fossil fuel use, with shifts like phasing out gas flaring (7 percent).

Such massive changes aren't going to happen on their own, so here are just a few policies proposed in the document that you might not expect from a typical oil magnate:

  • Carbon pricing
  • Tighter energy efficiency standards
  • Dense urban design (rather than sprawling car-centric design, for instance)
  • A sharing economy that offers “more efficient ownership models of assets such as vehicles”
  • Treating fossil fuels like a scarce resource
  • An immediate decline in coal use
  • Holding gas production to 2 percent above today's levels in 2040
  • Drastically reducing methane leakage
  • Cutting oil use 30 percent by 2040

This consensus of global power players looks a lot like a climate hawk's dream. Perhaps a bit more fossil fuel presence in the long term, and more hope held out for carbon capture and sequestration, but the vision of bold public policy to forcefully shift the trajectory of the global economy shines through.

It's unclear what role the oil and gas supermajors would play in this transition. Perhaps Shell will sign up as the first to convert to a renewable power supermajor, and stun its peers with a swiftly adopted new business model. Indeed, today's supermajors could play a leading role in the $300 billion annual investment in clean energy infrastructure called for by 2030.

from GTM Solar https://www.greentechmedia.com/articles/read/oil-and-gas-heavyweights-back-a-Roadmap-for-Deep-Decarbonization

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